Post-Fund deal

HE euphoria that greeted the IMF Staff-Level Agreement on a new nine-month Stand-by Arrangement (SBA) of $3 billion was understandable. The economy was facing near-certain default and was in the midst of a deep slump, with little or no growth last financial year. This was accompanied by unprecedented inflation of 35 per cent, causing the IMF to insist on hiking interest rates further to an all-time high of 22pc — the highest in living memory. Poverty levels have soared and left five million workers actively seeking and not finding jobs. That it was a self-inflicted wound in large part was brought home when the prime minister rightly took credit for the last-minute agreement as the head of the economic team that had failed to achieve this over six months — mainly due to his misplaced confidence — sat next to him. Indeed, the economy overall has been very poorly managed over the last year. The first thing to note about the IMF SBA is that only the first tranche of $1.1bn will come in later this month after the agreement is approved by the IMF Board. The second and third tranches will only be forthcoming at three-month intervals after a joint review and the IMF’s go-ahead.